On a languid summer evening, the pavements of Rua do Rosário are packed with people drinking cold beer and caipirinhas. Music throbs from bar to bar and outside the street's most expensive-looking house two armed guards stand solemnly looking on. From nowhere, a firework pops overhead.

Soon the carousing is interrupted again when three men on horseback appear, incongruously, at the top of the street. One of them, all manly thighs and black Stetson, draws catcalls from the intoxicated crowds as he fights to keep his skittish horse under control. It's a battle between man and beast all the way downhill as the horse bucks and lurches but the rider wins, just - and then races back up for a victory lap. Welcome to a regular Saturday night in Pirenópolis.

With a name like something from a graphic novel and a claim to fame as home to more VW Beetles per capita than any other town in Brazil, you might think Pirenópolis would be better known. Yet, in a country as big as this one it is easy for places to go undiscovered, or whole states in the case of Goiás, where Pirenópolis is located. Without the beaches of Bahia, or the showy wildlife of the Amazon, Goiás doesn't often feature on the tourist circuit. It should, though. With its vast inland plains and big skies spreading east from Brasilia, the region is characterised by pretty, cobbled colonial towns, hot springs, forests, waterfalls and wild, scented cerrado (tropical savannah). All of which have played a part in drawing the state's other big signature feature: hippies.

Although the region is home to such counter-culture hubs as the Vale do Amanhecer (Sunrise Valley), a religious community started by a clairvoyant truck driver, and the Casa de Dom Inácio de Loyola, where a self-styled 'psychic surgeon' calling himself John of God claims to heal cancer, Aids, blindness, asthma, drug addiction, alcohol abuse and 'spiritual desperation' with invisible operations, a less extreme alternative scene can be found around the town of Alto Paraiso, in the far north of the state.

With its 40-odd mystical, philosophical and religious groups, locals like to call Alto Paraiso the Brazilian capital of the third millennium. Rumour also has it that latitude 14, which crosses Machu Picchu in Peru and zips through the town, is to blame for the high number of UFO sightings in the area. But travelling there by bus from Brasilia felt less like a mission to Mars than a journey to the centre of the earth. The 225km route carves a path through endless fields and red earth deep into the Brazilian interior, passing lonely farms, puddles the colour of sweet potato soup, and termite mounds as big as Stonehenge. That Alto Paraiso isn't your average hilltop hangout quickly became clear when I got off the bus to be met by a man in dreadlocks playing a flute.

To his regret, though, I wasn't there to buy beads or bongs but to visit the nearby Parque Nacional da Chapada dos Veadeiros. Created in 1961, this 65,000 hectare park (only a small part of which is open to the public) was listed as a Unesco world heritage site in 2001, in the hope of protecting the unique cerrado ecosystem from encroaching cattle, soy, and now biofuel farming; the rate of habitat loss here is said to be even greater than that in Amazonia.

What remains is an impressively rich biodiversity. Of the 10,000 plant species found here - including 25 different orchids, purple trumpet-bushes, copa trees, pepper trees, prickly ash, murity palms and babaçu palms - 44 per cent exist only in the cerrado. Though rarely spotted in the areas tourists are allowed into, the park also attracts some of Brazil's most unusual - and in some cases endangered - animals. Pampa and swamp deers, jaguars, wolves, rheas, armadillos, anteaters, capybaras, tapirs, toucans and vultures all survive here.

The catch is that you can't enter Chapada dos Veadeiros without an accredited guide. So the next day I met Marcelo from Travessia Tourism and what appeared to be the only two other tourists in town - Yaz from Australia and Maggie from Switzerland - for the drive to the park.

Access is via one of two trails - either 'canyons and rocks' or 'waterfalls' - and we opted for the waterfalls. Setting off for a five-hour hike past towering waterfalls, jagged canyons and natural swimming pools, it wasn't long before the scrubby vegetation opened out and we were confronted by a spectacular view across a vast, ancient plateau.

From here, we picked our way down into a lush valley, criss-crossing a stream over natural stepping-stones. From feathery grasses to colour-splattered bushes, flowers that looked like exotic sweet peas, bright lichen-mottled driftwood and the region's signature chuveirinho, or 'shower flower' (imagine a football-sized dandelion), the plants were so beautifully bizarre that it was like walking through a children's storybook.

Eventually we came out at the largest waterfall, a 120m-high cascade that thundered so hard into the bottom of the adjacent canyon that it seemed to be falling in slow motion. Just as mesmerising was the multi-coloured quartz crystal in the park's rocky ground. Once exported widely, it is now left to provide a glimmering carpet. 'Look at this,' said Yaz, crouching down to stroke the ground as we came to a particularly sparkly spot. 'This is paradise, man.'

He didn't feel quite as enthralled after lunch when, having nonchalantly stripped and dived into the nearest pool, Marcelo suddenly shouted across to him that he should get out of the water unless he wanted an athletic-sounding organism to swim up his penis.

I thought back to Yaz a few days later when I headed back south to Pirenópolis and went for a swim at Cachoeiras Bonsucesso, a series of waterfalls just outside town. Judging by the number of people taking a dip, I don't think there could have been any underwater nasties there, though the family crowds might not have appreciated his casual approach to swimwear.

Near the falls is Fazenda Vagafogo, a farm surrounded by rolling green meadows and grazing horses that look so English that if it weren't for the odd termite mound or palm tree you might think you were tramping through the grounds of a stately home. The forest trail that spools out from the back of the farm is more exotic. Full of giant jatobá trees, overgrown lianas and the sound of monkeys, if you're lucky you may catch a glimpse of a morpho butterfly whose huge, electric-blue wings shimmer against the muddy background.

The Vagafogo brunch is an institution among tourists from Brasilia, an extravagant array of local fruits, cheeses, breads, chutneys, jams and meats. I spent an hour working my way through mangaba juice, starfruit chutney and sanclish (a tasty mix of curd cheese, onions, oil and tomatoes). I seemed to be the only non-Brazilian visitor.

But then Goiás has always been off the map. I was told the history of the Kalungas, a group of 4,000 people who live around 100km from Alto Paraiso. Until the 1960s, when the construction of Brasilia started opening up this region, the Kalungas had lived hidden from the outside world ever since their ancestors had run away from their colonial slave owners hundreds of years earlier. Apparently they stayed undetected only because this part of Goiás was so neglected. The lost world endures.